When I inspect the property I can usually get a feel for what deferred maintenance exists as well as what it would approximately cost to make the place rentable.This gives me much of the costs.

This will minimize the tax burden of the gain you currently have and defers any other gain through the 1031 giving you more buying power going into the future.

If you’re concerned about paying personal capital gains tax, remember that flipping the property means you’ll take the profit all at once, while with BRRRR, you can defer some taxes and have the property generating income.So, here’s what I’d do in your shoes:If you can make a decent profit flipping and then use that cash to roll into your next investment, you might be better off taking the cash, at least for the first project.

You cannot transfer the 1031 exchange benefits to another property, and gains are deferred, not eliminated.This post does not create a CPA-Client relationship.

You could setup something where the fees are deferred until you secure the construction loan and then pay them 1.5-2x their standard fee if they waited the 6-18 months to get paid.

For example a property with a $100,000 door cost and very little capex is going to be a much better deal than a property across the street that is $80,000 per door but has significant deferred maintenance.So the analysis is preliminary and either can be used, but at end of the day you need to deep dive into the entire picture.

If you’re looking to defer taxes on that $400k bonus, as Sean pointed out, one way to do so is by qualifying as a real estate professional.

@Richard Nguyen A self-directed IRA (SDIRA) offers flexibility to invest in real estate and alternative assets, with tax-deferred or tax-free growth.

Real estate pros buy property using leverage and bonus depreciate to perpetually defer taxes.

The closing attorney or Title company may be the determiner for an answer and usually at this point in the process as an agent I'd defer to them.As an investor, I think I'd want all this squared away before closing so maybe check with the attorney/closing company.